Mechel Reports 2012 Operational Results

Mechel Reports 2012 Operational Results

MOSCOW, Jan. 31, 2013 (GLOBE NEWSWIRE) -- Mechel OAO (NYSE:MTL), one of the
leading Russian mining and metals companies, announces 2012 operational
results.

Production and sales for 2012

Production:
               2012,    2011,    2012                       3Q2012,  4Q2012
Product name   thousand thousand vs.   4Q2012, thousand     thousand vs.
               tonnes   tonnes   2011, tonnes               tonnes   3Q2012, %
                                 %
Coal
(run-of-mine)  27,763   27,625   +1    6,970                7,414    -6

Pig iron       4,161    3,728    +12   1,054                1,092    -3

Steel          6,532    6,118    +7    1,430                1,710    -16


Sales:
                        2012,     2011,     2012    4Q2012,   3Q2012,  4Q2012
Product name            thousand  thousand  vs.     thousand  thousand vs.
                        tonnes    tonnes    2011, % tonnes    tonnes   3Q2012,
                                                                       %
Coking coal concentrate 11,542    12,511    -8      2,513     2,792    -10

Including coking coal
concentrate supplied to 2,590     2,876     --10    640       652      -2
Mechel enterprises
PCI                     2,428     1,969     +23     725       629      +15

Anthracites             2,391     2,344     +2      453       587      -23

Including anthracites
supplied to Mechel      271       323       -16     25        57       -56
enterprises
Steam coal              5,910     6,438     -8      1,420     1,595    -11
                        
Including steam coal
supplied to Mechel      1,540     1,319     +17     419       402      +4
enterprises
Iron ore concentrate    4,390     4,404     0       1,171     1,146    +2
                        
Including iron ore
concentrate supplied to 280       1,693     -83     12        110      -89
Mechel enterprises
Coke                    3,561     3,457     +3      854       854      0

Including coke supplied 2,448     2,415     +1      546       564      -3
to Mechel enterprises
Nickel                  11        16.3      -32     0.5       2.5      -81
Including nickel
supplied to Mechel      2         4.9       -67     0         0.5      -100
enterprises
Ferrosilicon            78        83.8      -6      22        21       +1
Including ferrosilicon
supplied to Mechel      30        30.3      -2      7.6       7.5      +2
enterprises
Chrome                  70        58.4      +20     17        13       +25

Including chrome
supplied to Mechel      9         13.5      --37    2         2.5      -18
enterprises
Flat products           718       679       +6      184       143      +29

Including those
produced by third       397       391       +1      94        66       +41
parties
Long products           4,073     3,821     +7      966       1,130    -14

Including those
produced by third       908       818       +11     242       263      -8
parties
Billets                 2,602     2,092     +24     652       726      -10

Including those
produced by third       881       1,437     --39    130       139      -7
parties
Hardware and welded     976       961       +2      239       273      -12
mesh
Including those
produced by third       57        52        +9      17        15       +19
parties
Forgings                57        60        -5      18        11       +59

Stampings               111       117       -5      28        28       +1

Electric power
generation (thousand    4,272,610 3,915,202 +9      1,175,399 845,163  +39
kWh)
Heat power generation   7,945,674 7,142,197 +11     2,536,507 925,332  +174
(Gcal)

Mechel OAO's Chief Executive Officer Evgeny Mikhel commented on the company's
2012 operational results:

"Despite market volatility, Mechel on the whole demonstrated positive dynamics
in the Group's key business areas over 2012.

"In the mining segment, production of run-of-mine coal increased by 1%
compared to last year's figures. The temporary suspension of mining activities
at Mechel Bluestone in late 2012, as well as difficult weather conditions and
current maintenance of mining equipment at Russian coal facilities had a
negative impact on the coal mining volumes in the fourth quarter.

"Nevertheless, Mechel continued to successfully pursue its strategy of
increasing the share of metallurgical coals in the mining division's overall
sales. For all of 2012, PCI sales were up by 23% and anthracites by 2%. A
23-percent decrease in anthracite sales in the fourth quarter was mostly due
to major European consumers reducing inventories at the end of the year.

"In 2012, iron ore concentrate sales remained on the level of 2011. During the
year, Korshunov Mining Plant's sales structure changed. It significantly
increased sales to external consumers, mostly Chinese steelmakers, and reduced
sales to Mechel's own enterprises. As a result, in 2012 intragroup sales
decreased while third-party sales increased by half.

"In the steel division, production of steel increased by 7% and pig iron by
12% as compared to last year's figures. The launch of Blast Furnace #5 at
Chelyabinsk Metallurgical Plant after capital maintenance and the
commissioning of a new electric furnace at Izhstal had a positive impact on
production volumes.

"Sales of long and flat rolls in 2012 went up by 7% and 6% respectively,
largely due to the sales and service network Mechel Service Global's Russian
and Kazakh subsidiaries optimizing work with the client base.

"One of Mechel's strategic priorities is increasing output of high-margin
metallurgical products. In line with this strategy, the Group, which has for
several years been the leader among Russian hardware producers, continues to
increase the production and sale of these products. In 2012 hardware and mesh
sales amounted to some 978,000 tonnes, which is 2% higher than last year. A
small decrease in hardware production in the fourth quarter was due to the
suspension of production at the company's Romanian assets due to unfavorable
prices on European steel markets.

"In the ferroalloys division, ferrochrome sales were up by 20% compared to
last year's figures. The 32-percent decrease in nickel sales was caused by the
halting of Southern Urals Nickel Plant following a weaker nickel market.
Ferrosilicon production stayed stable, and the small difference between
itssales in 2012 and 2011 are due to longer ownership transfer periods for
volumes sold in late 2012.

"In 2012 the Group's power division enterprises increased generation of heat
to 7,945,674 Gcal and electricity to 4,272,610 KWh, which means a 11% and 9%
increase, respectively. That was due not only to increased demand for energy
resources, but also a successful 2012 maintenance campaign, as well as
renovation of key facilities as part of implementing an investment program for
Mechel-Energo OOO and the Group's other power assets."

Mechel is one of the leading Russian companies. Its business includes four
segments: mining, steel, ferroalloy and power. Mechel unites producers of
coal, iron ore concentrate, nickel, ferrochrome, ferrosilicon, steel, rolled
products, hardware, heat and electric power. Mechel products are marketed
domestically and internationally.

The Mechel OAO logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=8181

All production and sales figures are preliminary and may be adjusted. Some of
the information in this press release may contain projections or other
forward-looking statements regarding future events or the future financial
performance of Mechel, as defined in the safe harbor provisions of the U.S.
Private Securities Litigation Reform Act of 1995. We wish to caution you that
these statements are only predictions and that actual events or results may
differ materially. We do not intend to update these statements. We refer you
to the documents Mechel files from time to time with the U.S. Securities and
Exchange Commission, including our Form 20-F. These documents contain and
identify important factors, including those contained in the section captioned
"Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements" in
our Form 20-F, that could cause the actual results to differ materially from
those contained in our projections or forward-looking statements, including,
among others, the achievement of anticipated levels of profitability, growth,
cost and synergy of our recent acquisitions, the impact of competitive
pricing, the ability to obtain necessary regulatory approvals and licenses,
the impact of developments in the Russian economic, political and legal
environment, volatility in stock markets or in the price of our shares or
ADRs, financial risk management and the impact of general business and global
economic conditions.

CONTACT: Mechel OAO
         Anton Lapin
         Tel: + 7 495 221 88 88
         antonlapin@mechel.ru

Mechel OAO Logo
 
Press spacebar to pause and continue. Press esc to stop.